Ardagh Group S.A. : - Third Quarter 2020 Results

LUXEMBOURG, Oct. 22, 2020 /PRNewswire/ -- Ardagh Group S.A. (NYSE: ARD) today announced its results for the third quarter ended September 30, 2020.

		September 30, 2020		September 30, 2019		Change		Constant Currency
		($'m except per share data)
Revenue (1)		1,800		1,728		4%		2%
Profit/(loss) for the period - Group		43		(29)
Profit/(loss) for the period margin - Group		2.4%		(1.7%)
Earnings/(loss) per share - Group		0.18		(0.12)
Adjusted EBITDA (1)		330		320		3%		1%
Adjusted EBITDA margin (1)		18.3%		18.5%
Adjusted earnings per share - Group (2)		0.48		0.60
Dividend per share declared (3)		0.15		0.14

Paul Coulson, Chairman and Chief Executive, said, "The Group performed very well in the quarter in a challenging operating environment, with continued strong growth in Metal Beverage Packaging and resumed volume growth in Glass Packaging, as on-premise channels re-opened. Our 2020 $250 million Business Growth Investment program has progressed well and will deliver new beverage can capacity in North America later this quarter. In addition, given a very favorable long-term outlook for sustainable packaging, we plan to invest over $1.8 billion in organic growth projects in 2021 to 2024, in addition to maintenance capex. This investment, will be principally in our beverage can business."

• Revenue for the quarter of $1,800 million, an increase of 4% at actual exchange rates and 2% at constant currency; Glass Packaging increased by 4% at constant currency, while Metal Beverage Packaging grew by 1% at constant currency, after the pass through of lower metal input costs.
• Group volume/mix increased by 3%, with growth of 4% and 3% in Metal Beverage Packaging and Glass Packaging respectively.
• Metal Beverage Packaging shipments increased by 7% in the quarter and by 4% in the year to date, with growth recorded in all regions. Specialty can shipments increased by 20% in the quarter and by 11% to date in 2020.
• Adjusted EBITDA of $330 million increased by 3% at actual exchange rates and 1% at constant currency. Metal Beverage Packaging Adjusted EBITDA increased by 9% at constant currency in the quarter. Glass Packaging Adjusted EBITDA decreased by 6% at constant currency.
• Earnings per share of $0.18 (2019: loss per share of $0.12), with Adjusted earnings per share of $0.48 (2019: $0.60).
• The 2020 $250 million Business Growth Investment program remains on track, with two new beverage can lines due to commence production in North America by the end of the year. The very favorable outlook for sustainable packaging supports planned organic investment of over $1.8 billion in business growth projects in 2021-2024, approximately 85% of which will be in our beverage can businesses and underpinned by long-term customer contracts. All told, investment in organic growth projects will exceed $2 billion in the five years to 2024, with investments of approximately $800 million in 2021, $500 million in 2022 and the remaining $500 million during 2023-2024. The investment program, which will be funded from existing cash resources, free cash flow and, where necessary, incremental debt will provide attractive, de-leveraging returns to the Group.
• Cash and available liquidity of $1.9 billion at September 30, 2020, including over $1.2 billion in cash, having fully repaid drawings under the Group's Global Asset Based Loan Facility during the quarter.
• Sustainability agenda further advanced during the quarter, with the commitment to adopt science-based sustainability targets.

 

Summary Financial Information
		Three months ended September 30,				Nine months ended September 30,
		2020		2019		2020		2019
		(in $ millions, except EPS, ratios and percentages)
Revenue (4)		1,800		1,728		5,028		5,079
Profit/(loss) for the period - Group		43		(29)		62		53
Profit/(loss) for the period margin - Group		2.4%		(1.7%)		1.2%		1.0%
Earnings/(loss) per share - Group		0.18		(0.12)		0.26		0.22
Adjusted EBITDA (4)		330		320		874		906
Adjusted EBITDA margin (4)		18.3%		18.5%		17.4%		17.8%
Adjusted profit for the period - Group (5)		113		142		273		339
Adjusted earnings per share - Group (5)		0.48		0.60		1.16		1.43
Adjusted operating cash flow (4)		345		255		241		288
						At September 30,		At December 31,
						2020		2019
						$'m		$'m
Net debt (6)						5,547		5,328
Cash and available liquidity						1,891		1,278
Net debt to LTM Adjusted EBITDA (7)						4.9x		4.5x

 

Financial Performance Review Bridge of 2019 to 2020 Revenue and Adjusted EBITDA Three months ended September 30, 2020
Revenue		Metal Beverage Packaging Europe		Metal Beverage Packaging Americas		Glass Packaging Europe		Glass Packaging North America		Group
		$'m		$'m		$'m		$'m		$'m
Revenue 2019		412		464		414		438		1,728
Organic		(6)		14		41		(9)		40
FX translation		15		—		17		—		32
Revenue 2020		421		478		472		429		1,800
Adjusted EBITDA		Metal Beverage Packaging Europe		Metal Beverage Packaging Americas		Glass Packaging Europe		Glass Packaging North America		Group
		$'m		$'m		$'m		$'m		$'m
Adjusted EBITDA 2019		68		67		108		77		320
Organic		2		11		(1)		(10)		2
FX translation		3		—		5		—		8
Adjusted EBITDA 2020		73		78		112		67		330
2020 margin		17.3%		16.3%		23.7%		15.6%		18.3%
2019 margin		16.5%		14.4%		26.1%		17.6%		18.5%
Nine months ended September 30, 2020
Revenue		Metal Beverage Packaging Europe		Metal Beverage Packaging Americas		Glass Packaging Europe		Glass Packaging North America		Group
		$'m		$'m		$'m		$'m		$'m
Revenue 2019		1,215		1,359		1,218		1,287		5,079
Organic		(6)		(2)		11		(41)		(38)
FX translation		(8)		—		(5)		—		(13)
Revenue 2020		1,201		1,357		1,224		1,246		5,028
Adjusted EBITDA		Metal Beverage Packaging Europe		Metal Beverage Packaging Americas		Glass Packaging Europe		Glass Packaging North America		Group
		$'m		$'m		$'m		$'m		$'m
Adjusted EBITDA 2019		209		184		292		221		906
Organic		(11)		24		(15)		(29)		(31)
FX translation		(1)		—		—		—		(1)
Adjusted EBITDA 2020		197		208		277		192		874
2020 margin		16.4%		15.3%		22.6%		15.4%		17.4%
2019 margin		17.2%		13.5%		24.0%		17.2%		17.8%

Group Performance

Revenue of $1,800 million increased by 4% in the three months ended September 30, 2020, compared with the same period last year. On a constant currency basis, revenue increased by 2%, due to favorable volume/mix effects in Metal Beverage Packaging and Glass Packaging Europe, partly offset by the pass through of lower input costs in Metal Beverage Packaging and lower demand in Glass Packaging North America.

Third quarter Adjusted EBITDA of $330 million increased by 3% at actual exchange rates, compared with the same period last year. On a constant currency basis, Adjusted EBITDA increased by 1%, as a 9% increase in Metal Beverage Packaging and a stable outturn in Glass Packaging Europe were partly offset by increased operating costs including $8 million COVID-19 related direct costs and unfavorable volume/mix in Glass Packaging North America.

Metal Beverage Packaging Europe

Revenue increased by $9 million, or 2%, to $421 million in the three months ended September 30, 2020, compared with $412 million in the three months ended September 30, 2019. Excluding favorable foreign currency translation effects of $15 million, revenue decreased by $6 million, with volume/mix growth of 1% offset by the pass through of lower metal costs.

Adjusted EBITDA increased by 7%, to $73 million in the three months ended September 30, 2020, compared with $68 million in the three months ended September 30, 2019. Excluding favorable foreign currency translation effects of $3 million, Adjusted EBITDA increased by $2 million, principally due to favorable volume/mix effects, partly offset by increased operating costs.

Metal Beverage Packaging Americas

Revenue increased by $14 million, or 3%, to $478 million in the three months ended September 30, 2020, compared with $464 million in the three months ended September 30, 2019. The increase in revenue principally reflected favorable volume/mix effects of 6%, partly offset by the pass through of lower input costs.

Adjusted EBITDA increased by $11 million, or 16%, to $78 million in the three months ended September 30, 2020, compared with $67 million in the three-month period ended September 30, 2019. The increase was mainly driven by favorable volume/mix effects, partly offset by higher operating costs.

Glass Packaging Europe

Revenue increased by $58 million, or 14%, to $472 million in the three months ended September 30, 2020, compared with $414 million in the three months ended September 30, 2019. Excluding favorable foreign currency translation effects of $17 million, revenue increased by $41 million, or 10%, mainly due to favorable volume/mix effects of 8%, partly as a result of increased customer demand as the relaxation of COVID-19 restrictions showed early signs of translating to a recovery in "on-premise" consumption, in addition to selling price increases including related to the pass through of higher input costs.

Adjusted EBITDA increased by $4 million, or 4%, to $112 million in the three months ended September 30, 2020, compared with $108 million in the three months ended September 30, 2019. Excluding favorable foreign currency translation effects of $5 million, Adjusted EBITDA was almost unchanged, as favorable volume/mix effects were offset by unfavorable fixed cost absorption as a result of lower production.

Glass Packaging North America

Revenue decreased by $9 million, or 2%, to $429 million in the three months ended September 30, 2020, compared with $438 million in the three months ended September 30, 2019. The decrease in revenue reflected unfavorable volume/mix effects of 2%, including a continued impact of COVID-19 on demand.

Adjusted EBITDA decreased by $10 million, or 13%, to $67 million in the three months ended September 30, 2020, compared with $77 million in the three months ended September 30, 2019. The decrease was mainly as a result of unfavorable volume/mix effects and higher operating and other costs.

COVID-19

The outbreak of the COVID-19 pandemic and measures to prevent its spread, including restrictions on travel, imposition of quarantines and prolonged closures of workplaces and other businesses, including hospitality, leisure and entertainment outlets, and the related cancellation of events, has impacted our business in a number of ways. This has included an adverse effect from reduced global economic activity and resulting demand for our customers' products and, therefore, the products we manufacture. It may also adversely affect our ability to operate our business, including potential disruptions to our supply chain and workforce. The COVID-19 impact on capital markets could also impact our cost of borrowing.

The ultimate significance of the impact of these disruptions, including the extent of their adverse impact on our financial and operational results, will be determined by the length of time that such disruptions continue, which will, in turn, depend on the duration of the COVID-19 pandemic, the impact of governmental and other regulations in response to the pandemic and the resulting effect on macroeconomic activity and consumer behavior.

During the three months ended September 30, 2020 the gradual relaxation of governmental measures to prevent the spread of the virus including lockdowns imposed earlier in the year, and in place for most of the second quarter, showed early signs of a recovery in "on-premise" consumption. In the quarter, this resulted in a sequential improvement in customer demand for our Glass packaging products which had experienced reductions in customer demand and therefore revenue as a direct consequence of the various global lockdowns and the related impact to "on-premise" sales during the second quarter. During the three months ended September 30, 2020, incremental COVID-19 related costs, including safety and cleaning costs, continued to be incurred throughout the Group.

Our response to the COVID-19 across our business operations can be summarized as follows:

Business Continuity: We are a leading supplier of consumer packaging solutions, comprising metal beverage cans and glass containers, primarily for the beverage and food end markets in Europe, North America and Brazil. In the markets we operate in, Ardagh is an essential provider of packaging to the beverage and food supply chain. Our people are deemed "Essential Critical Infrastructure Workers" under the guidance of the U.S. Department of Homeland Security, as are our customers. Where other governments issued guidance, we received equivalent designations in all other countries where we operate. We will continue to manage our capacity in response to the evolution of demand.

Employee health and safety: The health and safety of our 16,000 employees and their families and communities, as well as our contractors, suppliers and customers has been our highest priority since the outbreak of the crisis. We established a Group-wide task force to ensure an effective and consistent response across our business. Regular updates have been issued and a dedicated intranet site established to facilitate effective communication of recommendations, policies and procedures. Communication with all stakeholders has been a core element in our response.

Measures continue to evolve in line with best practice and with recommendations by national health authorities and the World Health Organization. Initiatives introduced to date have included: enhanced hygiene procedures in all locations, including temperature screening and increased cleaning in our production facilities; increased investment in personal protective equipment; adapting work practices and routines to ensure social distancing; establishing procedures for self-isolation; travel advisories including restrictions on all non-essential travel, prior to broader restrictions on any travel; restrictions on visitors to our production facilities or by our employees to external facilities; actively encouraging and ultimately requiring remote working for non-operational personnel, and enhancing our IT capability to facilitate increased remote working.

Strong liquidity: During the third quarter the Group repaid in full the drawings on our Global Asset Based Loan Facility. The Group had $1,230 million in cash and cash equivalents and restricted cash as of September 30, 2020, as well as available but undrawn liquidity of $661 million under its credit facilities.

Earnings Webcast and Conference Call Details

Ardagh Group S.A. (NYSE: ARD) will hold its third quarter 2020 earnings webcast and conference call for investors at 3 p.m. BST (10 a.m. ET) on October 22, 2020. Please use the following webcast link to register for this call:

Webcast registration and access:
https://onlinexperiences.com/Launch/QReg/ShowUUID=00A39331-7806-4CD6-9FF0-E594511E59C6

Conference call dial in:
United States: [phone]
International: [phone]
Participant pin code: 24030274#

Slides and quarterly report
Supplemental slides to accompany this release are available at http://www.ardaghgroup.com/investors.

The third quarter 2020 interim report for ARD Finance S.A., issuer of the Senior Secured Toggle Notes due 2027, will be published in due course and available at http://www.ardholdings-sa.com/.

About Ardagh Group

Ardagh Group is a global supplier of infinitely recyclable metal and glass packaging for the world's leading brands. Ardagh operates 56 metal and glass production facilities in 12 countries, employing more than 16,000 people with sales of approximately $7bn.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Non-GAAP Financial Measures 

This press release may contain certain financial measures such as Adjusted EBITDA, working capital, Adjusted operating cash flow from continuing operations, Adjusted free cash flow, net debt, Adjusted profit/(loss), Adjusted earnings/(loss) per share, and ratios relating thereto that are not calculated in accordance with IFRS or US GAAP. Non-GAAP financial measures may be considered in addition to GAAP financial information, but should not be used as substitutes for the corresponding GAAP measures. The non-GAAP financial measures used by Ardagh may differ from, and not be comparable to, similarly titled measures used by other companies.

 

Consolidated Interim Financial Statements Consolidated Interim Income Statement for the three months ended September 30, 2020
		Unaudited						Unaudited
		Three months ended September 30, 2020						Three months ended September 30, 2019
		Before						Before
		exceptional		Exceptional				exceptional		Exceptional
		items		items		Total		items		items		Total
		$'m		$'m		$'m		$'m		$'m		$'m
Revenue		1,800		—		1,800		1,728		—		1,728
Cost of sales		(1,499)		(3)		(1,502)		(1,430)		(5)		(1,435)
Gross profit		301		(3)		298		298		(5)		293
Sales, general and administration expenses		(85)		(8)		(93)		(80)		(28)		(108)
Intangible amortization		(59)		—		(59)		(59)		—		(59)
Operating profit		157		(11)		146		159		(33)		126
Net finance expense		(78)		—		(78)		(115)		(112)		(227)
Share of post-tax profit/(loss) in equity accounted joint venture		2		(4)		(2)		—		—		—
Profit/(loss) before tax		81		(15)		66		44		(145)		(101)
Income tax (charge)/credit		(24)		1		(23)		(13)		17		4
Profit/(loss) from continuing operations		57		(14)		43		31		(128)		(97)
Profit from discontinued operation, net of tax		—		—		—		70		(2)		68
Profit/(loss) for the period		57		(14)		43		101		(130)		(29)
Profit/(loss) attributable to:
Equity holders						43						(29)
Non-controlling interests						—						—
Profit/(loss) for the period						43						(29)
Earnings/(loss) per share:
Basic and diluted earnings/(loss) per share attributable to equity holders						$0.18						($0.12)
Earnings/(loss) per share from continuing operations:
Basic and diluted earnings/(loss) per share from continuing operations attributable to equity holders						$0.18						($0.41)

 

Consolidated Interim Income Statement for the nine months ended September 30, 2020
		Unaudited						Unaudited
		Nine months ended September 30, 2020						Nine months ended September 30, 2019
		Before						Before
		exceptional		Exceptional				exceptional		Exceptional
		items		items		Total		items		items		Total
		$'m		$'m		$'m		$'m		$'m		$'m
Revenue		5,028		—		5,028		5,079		—		5,079
Cost of sales		(4,230)		(5)		(4,235)		(4,248)		2		(4,246)
Gross profit		798		(5)		793		831		2		833
Sales, general and administration expenses		(258)		(14)		(272)		(234)		(42)		(276)
Intangible amortization		(175)		—		(175)		(176)		—		(176)
Operating profit		365		(19)		346		421		(40)		381
Net finance expense		(183)		(74)		(257)		(355)		(112)		(467)
Share of post-tax loss in equity accounted joint venture		(10)		(12)		(22)		—		—		—
Profit/(loss) before tax		172		(105)		67		66		(152)		(86)
Income tax (charge)/credit		(56)		29		(27)		(23)		28		5
Profit/(loss) from continuing operations		116		(76)		40		43		(124)		(81)
Profit from discontinued operation, net of tax		—		22		22		144		(10)		134
Profit for the period		116		(54)		62		187		(134)		53
Profit attributable to:
Equity holders						62						53
Non-controlling interests						—						—
Profit for the period						62						53
Earnings per share:
Basic and diluted earnings per share attributable to equity holders						$0.26						$0.22
Earnings/(loss) per share from continuing operations:
Basic and diluted earnings/(loss) per share from continuing operations attributable to equity holders						$0.17						($0.34)

 

Consolidated Interim Statement of Financial Position
	Unaudited		Unaudited
	At September 30,		At December 31,
	2020		2019
	$'m		$'m
Non-current assets
Intangible assets	2,758		2,884
Property, plant and equipment	2,736		2,677
Derivative financial instruments	27		4
Deferred tax assets	239		204
Investment in material joint venture	381		375
Other non-current assets	69		68
	6,210		6,212
Current assets
Inventories	933		964
Trade and other receivables	910		734
Contract assets	116		151
Derivative financial instruments	14		3
Cash and cash equivalents	1,230		614
	3,203		2,466
TOTAL ASSETS	9,413		8,678
Equity attributable to owners of the parent
Issued capital	23		23
Share premium	1,292		1,292
Capital contribution	485		485
Other reserves	170		165
Retained earnings	(2,330)		(2,181)
	(360)		(216)
Non-controlling interests	1		1
TOTAL EQUITY	(359)		(215)
Non-current liabilities
Borrowings	6,382		5,524
Lease obligations	270		291
Employee benefit obligations	859		716
Derivative financial instruments	48		44
Deferred tax liabilities	320		344
Provisions	43		29
	7,922		6,948
Current liabilities
Borrowings	20		22
Lease obligations	75		73
Interest payable	84		60
Derivative financial instruments	15		17
Trade and other payables	1,448		1,628
Income tax payable	125		97
Provisions	48		48
Dividend payable to shareholders	35		—
	1,850		1,945
TOTAL LIABILITIES	9,772		8,893
TOTAL EQUITY and LIABILITIES	9,413		8,678

 

Consolidated Interim Statement of Cash Flows
		Unaudited
		Three months ended September 30,				Nine months ended September 30,
		2020		2019		2020		2019
		$'m		$'m		$'m		$'m
Cash flows from operating activities
Cash generated from continuing operations		481		386		585		717
Interest paid		(30)		(120)		(187)		(328)
Income tax paid		(11)		(5)		(34)		(38)
Net cash generated from operating activities - continuing operations		440		261		364		351
Net cash generated from operating activities - discontinued operation(8)		—		139		—		159
Net cash generated from operating activities		440		400		364		510
Cash flows used in investing activities
Purchase of property, plant and equipment		(119)		(123)		(345)		(397)
Purchase of software and other intangibles		(3)		(2)		(8)		(8)
Proceeds from disposal of property, plant and equipment		—		1		1		1
Investing cash flows used in continuing operations		(122)		(124)		(352)		(404)
Proceeds from disposal of discontinued operation		—		—		32		—
Investing cash flows used in discontinued operation		—		(28)		—		(96)
Net cash used in investing activities		(122)		(152)		(320)		(500)
Cash flows from financing activities
Proceeds from borrowings		—		1,706		4,068		1,923
Repayment of borrowings		(502)		(1,652)		(3,255)		(1,652)
Early redemption premium paid		—		(90)		(61)		(90)
Deferred debt issue costs paid		(8)		(12)		(30)		(12)
Lease payments		(23)		(19)		(68)		(55)
Dividends paid		—		(33)		(69)		(99)
Consideration received on extinguishment of derivative financial instruments		—		23		—		9
Financing cash flows (used in)/from continuing operations		(533)		(77)		585		24
Financing cash flows from discontinued operation		—		15		—		—
Net cash (outflow)/inflow from financing activities		(533)		(62)		585		24
Net (decrease)/increase in cash and cash equivalents		(215)		186		629		34
Cash and cash equivalents at beginning of period		1,448		374		614		530
Foreign exchange losses on cash and cash equivalents		(3)		(20)		(13)		(24)
Cash and cash equivalents at end of period		1,230		540		1,230		540

 

Financial assets and liabilities

At September 30, 2020, the Group's net debt and available liquidity was as follows:

Maximum

Final

amount

maturity

Facility

Undrawn

Facility

Currency

drawable

date

type

Amount drawn

amount

Local

Local

currency

currency

$'m

$'m

m

m

5.250% Senior Secured Notes

USD

700

30-Apr-25

Bullet

700

700

–

4.125% Senior Secured Notes

USD

1,215

15-Aug-26

Bullet

1,215

1,215

–

2.125% Senior Secured Notes

EUR

439

15-Aug-26

Bullet

439

514

–

2.125% Senior Secured Notes

EUR

790

15-Aug-26

Bullet

790

925

–

6.000% Senior Notes

USD

800

15-Feb-25

Bullet

800

826

–

4.750% Senior Notes

GBP

400

15-Jul-27

Bullet

400

513

–

5.250% Senior Notes

USD

800

15-Aug-27

Bullet

800

800

–

5.250% Senior Notes

USD

1,000

15-Aug-27

Bullet

1,000

1,000

–

Global Asset Based Loan Facility

USD

660

07-Dec-22

Revolving

–

–

660

Lease obligations

Various

–

–

Amortizing

–

345

–

Other borrowings/credit lines

Various

–

Rolling

Amortizing

–

20

1

Total borrowings / undrawn facilities

6,858

661

Deferred debt issue costs and bond discounts and bond premium

(111)

–

Net borrowings / undrawn facilities

6,747

661

Cash and cash equivalents

(1,230)

1,230

Derivative financial instruments used to hedge foreign currency and interest rate risk

30

–

Net debt / available liquidity

5,547

1,891

 

The maturity profile of the Group's Senior Secured Notes and Senior Notes is as follows:
		At September 30,		At December 31,
		2020		2019
		$'m		$'m
Within one year or on demand		–		–
Between one and three years		–		695
Between three and five years		1,526		832
Greater than five years		4,967		4,029
Total Senior Secured Notes and Senior Notes		6,493		5,556

 

Reconciliation of profit/(loss) for the period to Adjusted profit
		Three months ended September 30,				Nine months ended September 30,
		2020		2019		2020		2019
		$'m		$'m		$'m		$'m
Profit/(loss) for the period - Group		43		(29)		62		53
Share of post-tax loss in equity accounted joint venture		2		—		22		—
		45		(29)		84		53
Exceptional items (9)		11		149		71		166
Tax credits associated with exceptional items (9)		(1)		(20)		(29)		(33)
Intangible amortization		59		61		175		192
Tax credit associated with intangible amortization		(14)		(16)		(41)		(43)
Losses/(gains) on derivative financial instruments and non- recurring Trivium transaction related foreign currency impact in net finance expense		1		(3)		(20)		4
		101		142		240		339
Share of Adjusted Profit in equity accounted joint venture		12		—		33		—
Adjusted profit for the period - Group (10)		113		142		273		339
Weighted average common shares		236.36		236.36		236.36		236.36
Earnings/(loss) per share - Group		0.18		(0.12)		0.26		0.22
Adjusted earnings per share - Group (10)		0.48		0.60		1.16		1.43

 

Reconciliation of profit/(loss) from continuing operations for the period to Adjusted EBITDA from continuing operations, Adjusted operating cash flow from continuing operations and Adjusted free cash flow - Group
		Three months ended September 30,				Nine months ended September 30,
		2020		2019		2020		2019
		$'m		$'m		$'m		$'m
Profit/(loss) from continuing operations		43		(97)		40		(81)
Income tax charge/(credit)		23		(4)		27		(5)
Net finance expense		78		227		257		467
Depreciation and amortization		173		161		509		485
Exceptional operating items		11		33		19		40
Share of post-tax loss in equity accounted joint venture		2		—		22		—
Adjusted EBITDA from continuing operations		330		320		874		906
Movement in working capital		162		78		(210)		(152)
Exceptional restructuring paid		(2)		(1)		(3)		(9)
Capital expenditure (11)		(122)		(124)		(352)		(404)
Lease payments		(23)		(18)		(68)		(53)
Adjusted operating cash flow from continuing operations		345		255		241		288
Adjusted operating cash flow from discontinued operation		—		124		—		76
Interest paid (12)		(30)		(118)		(187)		(329)
Income tax paid		(11)		(17)		(34)		(53)
Adjusted free cash flow - Group (13)		304		244		20		(18)

 

(1) Continuing Operations results unless stated otherwise. A reconciliation to the most comparable GAAP measures can be found at the back of this release.

(2) Adjusted earnings per share and Adjusted profit for the three and nine months ended September 30, 2020 includes the Group's share of the Adjusted profit of its material equity accounted joint venture, Trivium Packaging B.V. which is further set out on the reconciliation at the back of this release. The comparative periods include the results of the divested Food & Specialty business, which have been presented as a Discontinued Operation.

(3) Payable on December 16, 2020 to shareholders of record on December 2, 2020.

(4) Continuing Operations results for the three and nine months ended September 30, 2019 unless stated otherwise. A reconciliation to the most comparable GAAP measures can be found at the back of this release.

(5) Adjusted earnings per share and Adjusted profit for the three and nine months ended September 30, 2020 includes the Group's share of the Adjusted profit of its material equity accounted joint venture, Trivium Packaging B.V. which is further set out on the reconciliation at the back of this release. The comparative periods include the results of the divested Food & Specialty business, which have been presented as a Discontinued Operation.

(6) Net debt is comprised of net borrowings and derivative financial instruments used to hedge foreign currency and interest rate risk, net of cash and cash equivalents. Net borrowings includes IFRS 16 lease obligations.

(7) Net debt to LTM Adjusted EBITDA, at December 31, 2019, reflects the LTM Adjusted EBITDA for Continuing Operations.

(8) Operating cash flows from the discontinued operation for the three and nine months ended September 30, 2019, include interest and income tax payments of $3 million and $11 million, and $5 million and $16 million respectively.

(9) Total exceptional items before tax for the nine months ended September 30, 2020 are primarily comprised of $74 million debt refinancing and settlement costs related to the redemption of notes in May and June,  $22 million gain arising from the finalization of the completion accounts relating to the disposal of the Food & Specialty Metal Packaging business and $29 million tax credits, primarily relating to U.S. tax reform and debt refinancing and settlement costs incurred in the period. Total exceptional items before tax for the nine months ended September 30, 2019 are primarily comprised of $112 million debt refinancing and settlement costs related to the notes repaid in August 2019 and $42 million transaction-related and other costs, primarily related to the combination of the Group's Food & Specialty Metal Packaging business with the business of Exal Corporation, $15 million related to a provision for a court award and related interest, net of the tax adjusted indemnity receivable in respect of the Group's U.S. glass business legal matter, $37 million related to a pension service credit recognized in Glass Packaging North America following amendments to a pension scheme, and $28 million tax credits, primarily related to debt refinancing and settlement costs, in addition to the aforementioned provision for a court award and related interest in respect of the Group's U.S glass business legal matter.  Further information in respect of exceptional items is set out in note 5 of the the unaudited consolidated interim financial statements for the three and nine months ended September 30, 2020 and 2019.

(10) Adjusted earnings per share and Adjusted profit for the three and nine months ended September 30, 2020 include the Group's share of the Adjusted profit of its material equity accounted joint venture, Trivium Packaging B.V.. The Group's share of the results of Trivium Packaging B.V. has been accounted for in accordance with the Group's accounting policies. The Adjusted profit of Trivium Packaging B.V. included in the Group's Adjusted profit has been calculated in conformity with the Group's definition and presentation of Adjusted profit, namely that the result for the period has been adjusted for the joint venture's exceptional items, net of tax and amortization, net of tax in order to derive Adjusted profit. The comparative periods include the results of the divested Food & Specialty business which have been presented as a Discontinued Operation.

(11) Capital expenditure for the three and nine months ended September 30, 2020, includes $57 million and $133 million relating to Business Growth Investment projects respectively.

(12) Interest paid in the three and nine months ended September 30, 2019, excludes $4 million in respect of the redemption, in August 2019, of the Group's $1,650 million 7.250% Senior Notes due 2024, related to the interest from the date the Notes were called for redemption to the redemption date.

(13) Adjusted free cash flow - Group for the three and nine months ended September 30, 2019 reflect that the Group divested the Food & Specialty business as of October 31, 2019.

 

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SOURCE Ardagh Group S.A.